How To Prevent Involuntary Account Closures

“I know we have issues. I just don’t know where to find them.” This is what an executive at a large bank recently told me. Bank executives know they have opportunities to improve the customer experience, better manage their risk, and create new revenue streams. Yet, they don’t always know where to begin.

Artists call this opportunity, white space.

In order to begin filling your white space, you need a framework that considers the internal and external forces that you are experiencing. One of your most undervalued forces is your customer feedback. Understanding your customer feedback is just as critical to evaluating opportunities for growth as is understanding your competitive forces, macroeconomic forces, and regulatory forces.

The PositivityTech® intelligent platform merges these forces, and fills this white space with patterns, forecasts, and priorities, at scale — based on your own customers’ voices. Using artificial intelligence and advanced predictive algorithms, PositivityTech turns your customers’ voices into data, showcasing your risks, opportunities, and competitive advantages.

Let’s see what this growth opportunity might look like when considering financial institutions’ account closures.

See why financial institutions are closing customers’ accounts

Recently, Chime faced criticism for closing customer accounts without warning. In a recent American Banker article, reporter Kate Berry wrote about Senate Banking Committee Chairman Sherrod Brown’s request to the Consumer Financial Protection Bureau (CFPB) to address these issues. In a letter to the CFPB, Brown wrote:

“Chime’s abrupt, involuntary closures of its customers’ accounts — and locking them out of access to their funds — can cause lasting damage to their financial condition… There are a number of consumer risks involving nonbanks, from privacy concerns, fraud, data breaches, and proper disclosure that these companies are not actually banks.”

As you know, the cost of acquiring a new customer greatly exceeds the cost of retaining a current customer. Account closures directly impact the P&L, and many initiatives exist to prevent customers from ending their relationship with their banks. Improved targeting for retention programs is informed by what your customers are telling you. While Chime, a fintech, may be in the media for involuntary account closures, most financial institutions are struggling with this issue, too.

Below are the institutions with the greatest number of complaints to the CFPB about account closures, as seen in PositivityTech:

Here is an example of an actual Chime customer complaint to the CFPB about an involuntary account closure, as seen in PositivityTech:

In the table from PositivityTech below, you can view the number of complaints about issues with closing an account from Chime customers to the CFPB, as compared to other customer complaints from other financial institutions. You can also see that a greater percentage of complaints about opening an account come from Chime customers, too.

Are companies adding enough new accounts to make up for these account closures? How can these account closures be prevented? When you know what your issues are and how to find them, you can begin to solve them, to meet customers’ needs, and to grow your P&L.

Create new revenue streams

We need to pay attention to our customers’ voices. With PositivityTech, customer conversations are integrated into our technologies so that financial institutions can pursue a human-centered approach that truly serves customers. Our customers are sharing their challenges with us and telling us what we need to know.

By listening to customers and using their voices as information sources, you can grow your relationships with your customers through targeted differentiation. You can monitor your progress, be prepared for your customers’ actions, and you can create policies and practices, and grow your business in ways that serve them. You can create new much-needed revenue streams, based on what your customers tell you they need and want.

See what PositivityTech can reveal about your company — and discover your opportunities for growth. Schedule a demo by emailing me at marcia.tal@positivitytech.com. I look forward to giving you the tools you need to fill your white space.